9/24/2016

HowtowinatCapsimandCompXMlearntowin

HowtowinatCapsimandCompXM
learntowin

Capsimmygoodness

https://caps1mstrat.wordpress.com/

1/5

9/24/2016

HowtowinatCapsimandCompXMlearntowin

(hps://caps1mstrat.les.wordpress.com/2014/06/winstonchurchill.jpg)Ivenoticedblogsandyoutubevideos
describingstrategiesonhowtowinthissimulation,buttheresultsusuallyarentthathigh;justhighenoughto
beattheirclass.Ourteamendedupwith34.04percentmarketshare,$229millionincumulativeprot,$87million
inroundeightprot,and$503millioninsales,whicharethebestresultsIcouldndjustgooglingaround.
Generalstrategy:Beaggressiveasitsazerosumgame.Ithinktherstpitfallcomesfromteamswholistentothe
professorandtreatitasafriendlycompetition,ortaketheadvicetobeaqualitynicheplayer.Itspossibletotake
overthemarketandgrabeverysegment,whichhasthebenetofchokingrevenuefromothercompanieswhile
makingyourslookbeer.Sinceyouretryingtoberst,yourscorecardwillestablishtheclasscurveand
automaticallygiveyourteamanA.Yes,forprobablytheonlyopportunityyouwillhaveincollege,youreceivean
Abyloweringthegradesofyourfellowclassmates.Enjoytheride.
Round1:Borrowlongtermdebttothehilt,andissuemaxstockandyoushouldhavearound$56milliontoplay
with.Youllzoomaheadofyourclassmatesastheyretootimidtofullycommitandgoallin.Collegestudentsin
theirearlytwentieshavethismisconceptionthatlowdebtisagoodthing,probablybecausetheyvebeen
traumatizedbystudentloans.Companiesusedebtforpositivethingssuchasgrowthandplantinvestment,similar
tohomeownerswhotakeonamortgageortakeoutequityontheirhome;itshouldntbeseenasabadthing.
Beforestartingyourpracticerounds,readyourcapstonestudentguideacoupletimestofamiliarizeyourselfwith
thegame.Itsadesperatesituationwhenyoutrytointuitorfeelyourwaythroughthegame.Wehadafew
teamswhodidntdotheresearchandlosttheirshirts.RememberwhatitfeltliketoloseinMonopolyorRisk?
Yeah,likethat.
Youwillbeatacrossroadswhenchoosinghowtoinvest.Eithergoheavyonautomation,orintroduceproductsin
highend,performance,andsize.Itspossibletobalancethingsoutanddoboth,butdecidenowwhichoptionyou
likemore.Automationincreasesthecontributionmarginandthusprotability,whilenewproductsrobyour
opponentsofmarketshare.Dontbotherwithintroducingnewtraditionalandlowendduetoautomationand
https://caps1mstrat.wordpress.com/

2/5

9/24/2016

HowtowinatCapsimandCompXMlearntowin
likemore.Automationincreasesthecontributionmarginandthusprotability,whilenewproductsrobyour
opponentsofmarketshare.Dontbotherwithintroducingnewtraditionalandlowendduetoautomationand
capacityrequirements.Traditionalshouldbenearthe88.5automationrange,lowend10towardstheendofthe
game,andthehighendoeringscanbeanywherefrom68,dependingonhowyouR&D.Remembertorampup
automationslowlyasyouneedTQMtokickinoverthreerounds:1500,1500,and1000.Employeesneedtobehired
with$5000and80hours.Theseareweaknessesyoucanexploitinyourenemies,sincetheyllbetootimidtogoall
in.Whenyouseetheirthatchedroofcoagesburnandhearthelamentationsoftheirwomen,youllknowyoure
onthepathofcapitalistenlightenment.=)

Marketingandpromotionhavesweetspots.Ifyoucouldntaorditinpreviousrounds,tryandcatchupwith
$3000spending,althoughtherearediminishingreturns.Forotherrounds,$2500isthebestcompromise.Whenyou
hit100%awareness,$1400isthemaintenanceamountforpromotion,$2500foraccessibility,and$3500accessibility
ifyouhavetwoproductsinthesamecategory.Whenyourebringinguptwoproducts,its$4500persegment
insteadof$3000foroneproduct.Splitthespendingto$2500forthenewproduct,$2000fortheold.Notethe
marketingdepartmentwillemphasizeoneproductovertheotherdependingonyourspending.
Automationisaninterestingone.Irecommend8.5fortraditional,10forlowend,and6.5fortherest.Itspossible
topushtraditionalto10,buttimeitsoyourenolongerR&Dingattheend;thisappliestolowendtoo.Figureout
theproductdriftandcompleteR&Dfortheidealspotbyround7.Forlowend,R&Ddoesntmaersolongas
yourewithinthecircleofproductdesirability.Forhigh,performance,andsize,youcanpushtoabout7.5
automation.Idbecarefulabouthighautomation.ThekeyistorampupyourTQMtohave47percentR&D
reduction.
Forprojections,1.2isyourbaseline.Youcalculatethisbygoingtoyourpotentialmarketsharepageinthe
CapstoneCourier,andmultiplyingcurrentmarketsizefromthesegmentanalysispage,bythegrowthrate,by
yourpotentialmarketsharepercentagefoundontherightside.Thatsyourworstcasescenarioprojection.Then
multipleby1.2intheproductionsectionforwhatyoullactuallymake.Inround4,youllexperiencearecession,so
pullprojectionsbackto1.15or1.10.Insituationswhereyourthreenewproductsarecomingonline,push
projectionswaybeyondpotentialmarketshare,suchas1.3or1.4.Youllprobablystockoutanddealwithcapacity
issuesasthatsexpensivewhenexpandingyourproductportfolio.Whenthemarketselesdownandyoustop
takingmarketshare,giveyourselfa1.15to1.20productionscheduletoavoidstockouts,whilestayingawayfrom
highinventorycarryingcosts.Notethatyournewproductswillcannibalizeyouroldproductsbyabout2percent,
butitsnotabigdealconsideringwhatyougain.Youcanscalebackoldproductionby2percenttocompensate.
Forsuchhighriskprojections,takeoutadditionallongtermloanstocoveryourcashposition.Nearthebeginning,
Iusedmyintuitionbysuggestingwegiveourselvesa$5millioncashbuerjustincase.Sureenough,wewereleft
with$4millionwhentheroundprocessed,meaningwewouldhavetakenanemergencyloanandsunkourgrowth
model.Overtime,increaseyourbuerasyourprojectionriskgoesup:$10million,$15,$20,andabout$30by
round8.Thatgivesyouabout10percentprotectionassuminga$300millionsalesyear,andifyoumake$503
million,emergencyloanswontbeanissue.
Stayawayfromcurrentdebtascommercialpaperbecomeduethenextyear.Itsbeertopay1percentmorein

https://caps1mstrat.wordpress.com/

3/5

9/24/2016

HowtowinatCapsimandCompXMlearntowin

Stayawayfromcurrentdebtascommercialpaperbecomeduethenextyear.Itsbeertopay1percentmorein
interesttohaveessentiallyfreemoneysinceithasatenyearmaturity.Notesomelongtermdebtbecomesdue
becauseofpreviousdebtincurredbeforethegamestarted.
Rememberthisisazerosumgame.Ivereadandheardfrompreviousteamsthatitsimpossibletotakeall
segmentssoyouhavetoconcedesomeofyourproducts.Ioeradierentlook,whereitspossibletohavea
strangleholdoverthesensorindustry.Inourgame,twoplayerindustrieswereessentiallybankruptwithnegative
earnings,whiletheotherwasasmallfractionofoursizebymarketcap.Thetwocomputerteamswereunder
maximumsecurityprisonlockdownasourproductschokedtheirsfrommakingmoney.Yeah,wehadfun
dominating.=)
CompXM:Ihadsimilarresultsintheclassnal.Withknowledgegainedfromcapsim,IimmediatelyR&Dedfor
threeproductsinthecore,nano,andelitecategories.ItshelpfultojustnamethemAxe2,Art2,andAnt2afteryour
regularproductstoavoidconfusion.Dontbotherwithathriftproductasitsananalogtotraditionalandlowend.
Theautomationandcapacityrequirementsaretooextreme,sofocusonhighendoeringsthatcanhittheground
running.Iendedthegamewith46.46percentmarketshare,twocompaniesindefault,andanotherinsecondplace.
Thegameissimilartocapsim,butonanacceleratedfourroundsimulation.GetTQM,workers,automation,and
capacityup,andyoullperformne.
Myonecomplaintaboutthegameisthelackofmergerandacquisitionactivity.Ifitwerepossibletolighttheir
defeatedcorporatebuildingsonrewithgasolineandmatches,wewouldhave.Inourminds,weboughtoutthe
troubledcompanieswecrushedinordertogainamonopoly.Forobviousreasons,thisistoocruelintheCareBear
Shareworldofcollege.Itssupposedtobealearningenvironment;althoughIarguetheywouldlearnplentywhen
theyexperienceahostiletakeover.Wecouldopenupthesimulationtosetupgoldenparachutesandpoisonpillsto
balanceoutM&A.

PostedonJune10,2014June10,2014byncheng4Taggedcapsim,churchill,college,compxm,nal,simulation,
strategy,tactics,winston76Comments
BLOGATWORDPRESS.COM.

https://caps1mstrat.wordpress.com/

4/5

9/24/2016

https://caps1mstrat.wordpress.com/

HowtowinatCapsimandCompXMlearntowin

5/5